Projects

The main assets of the sector in terms of production, transport and distribution have been acquired through public investment. Although public investment has advantages in terms of less complexity associated with works contracts and lower financial costs associated with concessional loans, in many cases, the participation of the private sector allows greater efficiency in investment decisions, risk mitigation and operation, which also constitutes an additional source of financing for the sector.

For the future, public investment should be reduced and reserved for activities and infrastructures that are in charge of the public sector or that benefit rural electrification, namely:

• large dams that due to their size cannot be made via private financing;
• Very High Voltage Transport – an activity that guarantees national energy security;
• investments in the distribution of areas that are the responsibility of the public utility company for the distribution of electricity; and
• investments in rural electrification, including transport and distribution infrastructures for isolated systems, which will later be managed by the private sector responsible for construction.

The participation of the private sector should cover an investment of USD8.9 billion, essentially at the level of Urban Production and Distribution.

There are general rules provided for in the Private Investment Law, approved by Law 10/18 of June 26, which are applicable to investment in the energy and infrastructure sector. Rules such as access to tax, exchange, customs and other benefits. Or also the forms of investment.

In addition to these rules, there are special rules for these sectors, of which we highlight the following:

The electricity sector has its main legislative and regulatory source in the Law no. 14-A / 96, of May 31 (General Electricity Law), which establishes the general guidelines the legal regime for the exercise of production, transportation, distribution and use of electrical energy, and has many other relevant diplomas, aimed to regulate its supply; distribution; production and transport chain, as also its commercial relations, including the quality of services, tariff regulation and access to networks and interconnections.

The exercise of electricity production, distribution and transport activities requires authorization from the state or a public legal person, by means of a concession or license.

The construction and operation of the electrical installations associated with the activities of production, distribution and transport of electricity also requires licensing, under the terms of the Installation Licensing Regulation. The competence for licensing these facilities is, as a general rule, the Ministry that supervises energy (Ministry of Energy and Water).

The regulation of the Angolan electrical system determines that the commercialization of electrical energy can be made within the scope of the Public Electrical System (SEP) (e.g. linked) or outside it (i.e. not linked).

According to the law, the approval of concessions as well as their attribution are the responsibility of the President of the Republic. The award of concessions is preceded by a public tender or restricted tender by prior qualification, carried out in accordance with the Public Procurement Law.

In the case of award to a public company or to a company under the effective control of the state, the above tender process is dispensed.

The attribution of licenses is the responsibility of the government, and this responsibility may be delegated to the local administration bodies of the state in its area of jurisdiction, the object of the licenses is concerned with the distribution and sale of electricity under a public service regime.

Public companies or companies with public domain of the state, if the investor is a public entity.

Or, for a private investor, the most common types of business structures considered by foreign companies to operate in Angola are:

• branches, which, although allowing the undertaking of commercial activities in Angola, are not independent legal entities, and thus the foreign parent entity undertakes unlimited liability for the obligations of the branch, and arising out from the performance of its activity in Angola; or
• representative offices, which are merely aimed at developing and following the business of the foreign entity in Angola but are expressly forbidden to conduct any commercial activity in the country; or
• companies (subsidiaries), which in Angola include (i) Private limited liability companies (Sociedades por Quotas), and (ii) Joint Stock limited liability companies (Sociedades Anónimas).